Affordable Housing is critical infrastructure – but who pays?

The private housing market continues to fail a large part of the population. Until and unless it is fundamentally changed, we advocate that a non-market alternative, in the form of Affordable Rental Housing, ought to be considered important infrastructure, funded through an efficient and effective infrastructure contribution system. This is part of a broader position we have, that the value created out of development and planning system decisions ought to be shared with the public, for the public good.

Late last year the Minister for Planning asked the NSW Productivity Commission to review the infrastructure contributions system. Shelter NSW participated in a series of focus groups conducted by the Commissioner. More recently, the NSW Government tabled a draft piece of legislation that would implement some basic changes in the way contributions are levied and deployed. Shelter CEO, John Engeler, and Senior Policy Officer, Cathy Callaghan, appeared before a NSW Parliament upper house committee to put forward Shelter’s views on the general direction of the Commissioner’s report and the proposed legislation.

Spoiler alert. The Committee released its report this week, recommending that the legislation not proceed.

It is evident from both the Productivity Commission’s Report and the Treasurer’s budget speech in which the Bill was introduced to Parliament that infrastructure contributions are largely seen as an impediment to new housing supply which would otherwise make housing more affordable.

The Commissioner’s recommendations, all of which are reflected in the proposed Bill, are on stripping back contributions to only those that are deemed necessary to allow development to proceed. Think sewers and roads, not to secure public goods such as affordable rental housing.

Crows Nest Over Station Development – NSW Department of Planning, Industry and Environment

At the inquiry we challenged this stripping back. Why shouldn’t contributions for affordable rental housing come out of that same pot of money? While it is true that the proposed Bill doesn’t change powers and processes for the levying of development to support Affordable Rental Housing, the Commission’s report has set up a worrying platform for any future review.
The Committee’s report is available on the NSW Parliament website, along with submissions, transcripts of evidence and other inquiry documents.

If you would like to read what we said to the inquiry and how we responded to Committee Members’ questions you can refer to the Committee Transcript (pages 19 – 26 of pdf).  Immediately following our appearance, Dr Cameron Murray provided a very informative contribution, helping the Committee understand how the property market ‘really works’.  Those wanting to learn more about the topic can find his input in the same transcript.